Size of FMCG market a positive for Ess Dee Aluminium: Aviral Gupta, Indian Equities

Aviral Gupta, Fund Manager, Indian Equities, in a chat with ET Now talks about Ess Dee Aluminium.

Could you tell us what exactly you like about Ess Dee Aluminium because you have a buy call on it and a target of 570?

What is happening is Ess Dee Aluminium took over India Foils around a year, year-and-a-half back and with this, they have two plants over there. One in Kamarhati and one in Hoera. Kamarhati is already functional and Hoera is refurbishing the whole plant again completely.

Now Hoera plant has caster units. This is backward integration which will happen in this company and they will save Rs 300 per tonne - one fourth of the capacity which they have. They are in an excellent segment again. They are all market leaders in their segment.

You look at Everest Kanto, you look at Gujarat Apollo, you look at India Foils, they are all market leaders in their segment. Now Ess Dee is also coming into FMCG market. There is no as such conclusive data available about the size of FMCG market but when we talked to the management, the sense we got was that just for Mishti Dahi and Nestlé Dahi, 20,000 tonnes per annum of foils is required. So the size of FMCG market is very big. That is one thing which will again propel earnings for this company.